Currently receiving Tax Credits. Move to Universal Credit?

thinfatwhiteduke

calcotti said:

thinfatwhiteduke said:

What do you mean? If I'm entitled to far less, than they should warn me against it once they review my application, otherwise it wouldn't make any sense. It would just be like a trap from the government.

The DWP will not warn you about anything before you claim. They will not tell you what you may get before you apply. The DWP  administer the benefits system, they are not benefits advisers. Once you have applied there is no going back.

Sounds like a leap in the dark. The system should be clear. There shouldn't be games with the life of the vulnerable people.

calcotti

thinfatwhiteduke said:

Tax Credits have a similar test, which is likely to catch up with you. Read this link:
https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/gainful-self-employment/
The government's reasoning behind these rules is that "they" are trying to stop the "trap" whereby the tax-payer subsidies non gainful self-employment. You may not agree with this, but this is their thinking.

What do you mean? There is not mention of Tax Credits in your link.

Try this https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/self-employed/

Alice_Holt

thinfatwhiteduke said:

Tax Credits have a similar test, which is likely to catch up with you. Read this link:
https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/gainful-self-employment/
The government's reasoning behind these rules is that "they" are trying to stop the "trap" whereby the tax-payer subsidies non gainful self-employment. You may not agree with this, but this is their thinking.

What do you mean? There is not mention of Tax Credits in your link.

  Sorry, my link gave you more info on UC.  On the same site under tax credits, you will find this:       

 " For tax credit purposes, HMRC define self-employed as meaning the self-employed activity is done on a commercial basis with a view to realising a profit and it must be organised and regular.

HMRC have applied this test to new claims from 6 April 2015 and they also check existing claims to see if those claimants also meet the new test. HMRC wrote out to existing claimants about the new test from July/August 2015 before they started to apply these rules to existing claims.

As a general rule, HMRC accept that a self-employed activity meets the test where income from that activity is at least the equivalent of the national minimum wage. HMRC have clarified that claims are checked against the test if the claimant's previous year income from self-employment is less than the number of working hours declared by the claimant x standard rate of national minimum wage.

Notably, this means for example that where a claimant says they normally work say 25 hours a week even if they are only required to work 16 hours a week to qualify for working tax credits, they may be selected for a check if their earnings fall below the threshold based on the hours they declare. (You can find the national minimum wage rates in our national minimum wage section). If they are not earning that amount, then HMRC may ask the claimant to provide evidence that they meet the requirements of the new test. The evidence asked for may include things such as business plans and other business records, including any relevant insurance documents (see HMRC’s Helpcard – note that this helpcard has not been updated in recent years to take account of the revised test but it can still prove a helpful guide.) It is expected that not everyone whose earnings fall below the threshold will necessarily be asked to prove their self-employment is commercial with a view to realising a profit and is organised and regular."

https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/self-employed/#Self%20employment%20and%20income

tomtom256

thinfatwhiteduke said:

calcotti said:

thinfatwhiteduke said:

What do you mean? If I'm entitled to far less, than they should warn me against it once they review my application, otherwise it wouldn't make any sense. It would just be like a trap from the government.

The DWP will not warn you about anything before you claim. They will not tell you what you may get before you apply. The DWP  administer the benefits system, they are not benefits advisers. Once you have applied there is no going back.

Sounds like a leap in the dark. The system should be clear. There shouldn't be games with the life of the vulnerable people.

Sorry missed the bit that states you are vulnerable?

Under Universal Credit, they will not subsidise self-employment like tax credits did, they expect you to be earning enough not to need benefits and be self sufficient, unless in the first year of trading.

It's quite clear but here is an idiots guide that may or may not be useful https://www.litrg.org.uk/tax-guides/self-employment/working-out-profits-losses-and-capital-allowance/how-do-i-work-out-my-0

Once_a_Lion

Alice_Holt said:

thinfatwhiteduke said:

What do you mean? If I'm entitled to far less, than they should warn me against it once they review my application, otherwise it wouldn't make any sense. It would just be like a trap from the government.

It is designed to deter people from claiming benefits when their self-employment efforts are insufficient to provide them with a living wage.  The government are, in effect, pushing you to find better full-time paying employment rather than playing at self-employment,

The government's reasoning behind these rules is that "they" are trying to stop the "trap" whereby the tax-payer subsidies non gainful self-employment. You may not agree with this, but this is their thinking.

Isn't that a good thing? 

thinfatwhiteduke

Once_a_Lion said:

Alice_Holt said:

thinfatwhiteduke said:

What do you mean? If I'm entitled to far less, than they should warn me against it once they review my application, otherwise it wouldn't make any sense. It would just be like a trap from the government.

It is designed to deter people from claiming benefits when their self-employment efforts are insufficient to provide them with a living wage.  The government are, in effect, pushing you to find better full-time paying employment rather than playing at self-employment,

The government's reasoning behind these rules is that "they" are trying to stop the "trap" whereby the tax-payer subsidies non gainful self-employment. You may not agree with this, but this is their thinking.

Isn't that a good thing? 

If there were plenty of jobs available, where you get paid and treated with dignity, yes it would be a bit more understandable.
But because we're heading towards call centers/deliveroo jobs with zero hour contracts (all self employed occupations), then it's a really inhumane thing to do. Making the poor poorer is never right, considering that every penny they receive it's quickly spent and sent back into the economy. (So it's actually good for the economy).
The right thing to do would be to make the rich pay their fair share of taxes, and stop them from flipping their billions into tax havens. These money could be used to invest in our underfunded public services, which should create real jobs.

calcotti

thinfatwhiteduke said: But because we're heading towards call centers/deliveroo jobs with zero hour contracts (all self employed occupations), then it's a really inhumane thing to do. 

People on zero hour contracts are not treated as self-employed. The MIF does not apply to them.